Dirty Secrets of Your Debit and Credit Cards

10/9/2013 4:53PM

Credit and debit cards certainly make life more convenient. But it's important to understand their deepest secrets so you can avoid making mistakes that cost you money, says MarketWatch's Jim Jelter. (Photo: AP)

This transcript has been automatically generated and may not be 100% accurate.

I ... so ... what's lurking in your wall ... credit cards and debit cards no doubt but those same cards ... the ones that make life so can you ... can also be a major headache if you don't pay attention to the fine print ... by Amgen Jelter MarketWatch ... engine that could be in a column by Urbi where exposes some of the little secrets ... consumers should pay attention to ... one is overdraft protection ... it's a feature that most of those appreciate many rely on ... but it's also a major source of revenue for the banks ... and were the ones paying ... well it might help you to avoid the public embarrassment of not having enough money in your account ... is that kind of protection ... really worth thirty four dollars ... because that's the core item overdraft fees banks charge consumers last year ... for overdraft protection ... now in two thousand said ... after a lot of complaints the Federal Reserve Board ruled overdraft protection must be an opt in service ... that new rule is a chronic over rafters a lot of money about forty five percent in overdraft fees according to the Consumer Financial Protection Bureau ... that if you're having a hard time keeping track of how much money is in you cannot ... say if you can have your bank said opted for a text alert to let you know when you're running low on funds ... this can be aligned cheaper than those over fees there's another little understood feature of credit and debit cards ... authorization all its ... users news but wanna merchants especially restaurants destinations ... authorization holds essentially pre authorize ... holding up to twenty five percent more than the actual price of their purchase ... putting a hold on your credit account for the extra mile ... if you don't have the funds to cover it ... the card might be denied ... this is basically insurance for merchants ... are just making sure they get paid ... by making sure that you are not at the end of the credit ... and it's perfectly legal and finally there's the Credit vs Devon St ... when you swipe your bank cards are often asked to choose between credit or debit ... credit is probably the better choice ... why ... because when you select credit ... typically hinted at the same security protection offered by a traditional credit card ... which comes in handy in terms of fraud prevention ... or resolving problems with your purchase down the road ... don't get that data protection ... with debit cards ...